The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Thursday, September 1, 2011

RBA Lowe: Aussie inflation pressures caused by 'weak productivity' and 'wages growth'

Dr Lowe: Yes. I think the underlying inflation pressures in the economy are really coming from this combination of relatively weak productivity growth and around average wage growth. That means that unit cost growth since the mid-2000s has been quite high. That has not led to a rising trend in inflation but it has led to fairly high inflation. It has been offset to some extent by the decline in manufactured prices. If you look at the CPI at the moment, the prices of many manufactured goods are lower than they were 10 years ago. That is the benefit of the high exchange rate, but the range of domestic services have been rising pretty solidly, and not just directly because of the mining sector but because of the growth in unit costs. That pressure, at least at the moment, does not seem to have gone away.